German insurance giant Allianz has agreed to create a joint venture (JV) with UK rival Liverpool Victoria Friendly Society (LV=) to create a personal insurer in Britain.
Allianz claims that the JV under the LV= brand name will be the UK’s third largest personal insurer with annual premium income of more than £1.7bn.
The JV combines LV=’s expertise in personal insurance with Allianz’s financial strength and technical excellence, and a shared passion for customer service. Initially the transaction includes Allianz purchasing a 49% stake in LV’s general insurance business for £500m. The deal is expected to close in the second half of this year.
Later in 2019, Allianz will pay another £213m in exchange for 20.9% stake in joint venture LV= GI as per the agreement.
Allianz chief executive Olvier Bäte said: "This partnership will first and foremost benefit our customers who will have access to an expanded range of products backed by the financial strength of Allianz. We value LV='s strong brand and market positioning.”
The JV will have more than 6 million customers and is subject to regulatory approval.
LV= chief executive Richard Rowney said: "The strategic partnership with Allianz will allow us to continue to benefit from a growing personal insurance business while also enabling us to strengthen our capital position, leaving us well placed to continue to expand our life and pensions business and pursue new digital opportunities."
Steve Treloar managing director of general insurance of LV= will operate the JV, and report to a board of directors drawn from LV= and Allianz.
Treloar said: “The combination of LV=’s strong brand, longstanding reputation in personal insurance and excellent customer service with the financial strength, digital expertise and data analytics of Allianz, the world’s largest P&C insurer, will allow us to further develop and expand the products and services that our customers demand.”
Image: Allianz Headquarters in Munich. Photo: courtesy of Allianz 2017.